We have constructed a murine homolog (ME26) of the avian acute leukemia virus, E26, which replicates efficiently in murine cells and expresses transforming functions both in vitro and in vivo. The ME26 p135 gag-myb-ets fusion protein is associated with the nucleus and is at least partially myristilated. NIH 3T3 mouse fibroblasts infected with ME26 form foci of overgrowing cells at low serum concentrations in tissue culture and form small colonies in agar suspension. Newborn NFS mice infected with ME26 rescued with amphotropic MuLV develop leukemia beginning about 100 days after infection, while animals infected with helper virus alone show no incidence of disease. We have identified a novel human DNA sequence with transforming potential which appears to have been generated as the result of the fusion of two human sequences during NIH 3T3 transfection. Portions of the sequences involved have been mapped to human chromosomes 8 and 9. These transforming sequences are not related to known oncogenic sequences located on these two chromosomes, nor to any of 10 other oncogenes tested. NIH 3T3 cells transformed by these sequences acquire the ability to grow in serum-free media, and conditioned media from these cells allow normal NIH 3T3 cells to grow in the absence of serum. Treatment of mouse fibroblasts with tunicamycin, and inhibitor on N-linked glycosylation, renders it susceptible to infection by the cat endogenous virus, RD114. The induction of the susceptible state is rapid and transient, and requires only subtoxic doses of tunicamycin. The effect is specific for RD114, and treated mouse cells remain resistant to GaLV, FeLV, or murine xenotropic viruses. An RD114 recombinant with an altered gp70 is unable to infect treated mouse cells, suggesting that the acquired susceptibility involves some specific interaction between the RD114 envelope and a cellular receptor protein.